Apollo Hospitals Enterprise Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are well covered by earnings (3.8x coverage).
• Dividends after 3 years are expected to be well covered by earnings (4.5x coverage).
• Dividends per share have been stable in the past 10 years.

Cons

• Apollo Hospitals Enterprise's pays a lower dividend yield than the bottom 25% of dividend payers in India (0.76%).
• Apollo Hospitals Enterprise's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Apollo Hospitals Enterprise's earnings are expected to grow significantly at over 20% yearly.
• Apollo Hospitals Enterprise's earnings growth is expected to exceed the India market average.
• Apollo Hospitals Enterprise's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Apollo Hospitals Enterprise's net income is expected to increase by more than 50% in 2 years time.
• An improvement in Apollo Hospitals Enterprise's performance (ROE) is expected over the next 3 years.
• Apollo Hospitals Enterprise's revenue growth is expected to exceed the India market average.

Cons

• Cash flow for Apollo Hospitals Enterprise is expected to increase but not above the 50% threshold in 2 years time.
• Apollo Hospitals Enterprise's earnings are expected to increase but not above the low risk growth rate next year.
• Apollo Hospitals Enterprise is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Performance (ROE) is not expected to exceed the current IN Healthcare industry average.
• Apollo Hospitals Enterprise's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Apollo Hospitals Enterprise's revenue is expected to grow by 11.3% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Apollo Hospitals Enterprise is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Apollo Hospitals Enterprise is profitable, therefore cash runway is not a concern.
• Apollo Hospitals Enterprise is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (24.6%, greater than 20% of total debt).

Cons

• Debt is not covered by short term assets, assets are 0.8x debt.
• Apollo Hospitals Enterprise's long term commitments exceed its cash and other short term assets.
• The level of debt compared to net worth has increased over the past 5 years (57.6% vs 109.8% today).
• Interest payments on debt are not well covered by earnings (EBIT is 2.2x annual interest expense, ideally 3x coverage).
• Apollo Hospitals Enterprise's level of debt (109.8%) compared to net worth is high (greater than 40%).
• High level of physical assets or inventory.

management

Pros

• The tenure for the Apollo Hospitals Enterprise board of directors is about average.
• Suneeta's remuneration is lower than average for companies of similar size in India.
• Suneeta's compensation has been consistent with company performance over the past year, both up more than 20%.
• More shares have been bought than sold by Apollo Hospitals Enterprise individual insiders in the past 3 months.
• The average tenure for the Apollo Hospitals Enterprise management team is over 5 years, this suggests they are a seasoned and experienced team.

Cons

past

Pros

• Apollo Hospitals Enterprise's 1-year earnings growth exceeds its 5-year average (53.4% vs -0.9%)
• Apollo Hospitals Enterprise has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
• Apollo Hospitals Enterprise's earnings growth has exceeded the IN Healthcare industry average in the past year (53.4% vs 14.4%).

Cons

• Apollo Hospitals Enterprise's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
• Apollo Hospitals Enterprise used its assets less efficiently than the IN Healthcare industry average last year based on Return on Assets.
• Apollo Hospitals Enterprise has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).

value

Pros

• APOLLOHOSP outperformed the Market in India which returned -14.5% over the past year.

Cons

• Apollo Hospitals Enterprise's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Apollo Hospitals Enterprise's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Apollo Hospitals Enterprise is overvalued based on assets compared to the IN Healthcare industry average.
• Apollo Hospitals Enterprise is poor value based on expected growth next year.
• Apollo Hospitals Enterprise is overvalued based on earnings compared to the IN Healthcare industry average.
• Apollo Hospitals Enterprise is overvalued based on earnings compared to the India market.
• APOLLOHOSP underperformed the Healthcare industry which returned 9.1% over the past year.
• NSEI:APOLLOHOSP is up 1.3% underperforming the Healthcare industry which returned 5.4% over the past month.
• NSEI:APOLLOHOSP is up 1.3% underperforming the market in India which returned 8% over the past month.